Mexico to review trade relations with China: ‘They sell to us, but they don’t buy from us,’ criticises

Mexico does not have reciprocal trade with China, since “it sells to us and does not buy from us,” so we have to do our own review and protect ourselves, said Rogelio Ramírez de la O.

The Secretary of Finance specified that the country buys 119 billion dollars a year from China and sells 11 billion to it.

At the Economic Balance event on industrial development and T-MEC, held in San Luis Potosí, attended by President Andrés Manuel López Obrador and President-elect Claudia Sheinbaum, he stressed that China’s loss of wage competitiveness and transportation costs is a great opportunity to reduce dependence on its imports, and to attract investments that would allow the creation of 520 thousand additional jobs in Mexico.

He explained that China’s international commercial expansion has been achieved at the cost of gaining ground on Mexico, the United States and Canada.

Since joining the World Trade Organization (in 2001), China has increased its global exports from 3.8 percent to 14 percent in just 22 years, and this increase has been largely at the expense of North America: the share of North America, the United States, Mexico and Canada has fallen from 19 percent in 2000 to 13 percent in 2022.

As China’s exports to the North American market have increased, gains from global trade indicate that China’s share of global GDP has increased from 3.6 percent to 18 percent; North America’s share has fallen from 35 percent to 29 percent; and the United States’ share of North America has fallen from 30 percent to 25 percent.

He stressed that the region remains highly dependent on purchases from China: the United States depends on 16.5 percent of all its imports; Canada, on 13.5 percent, and Mexico, 19.6 percent.

“This is a situation that has led to a feeling of protecting our industries more and this feeling has grown both in the United States and in Mexico,” Ramírez de la O emphasized.

The ninth most attractive

When taking the floor, the Secretary of Economy, Raquel Buenrostro Sánchez, assured that Mexico has positioned itself as the ninth most attractive country in the world to receive foreign direct investments and has surpassed economies such as Spain, Australia and South Korea.

At the event, Buenrostro highlighted that Mexico currently occupies the twelfth place among the largest economies in the world, surpassing nations such as Spain, Australia and South Korea.

“We have broken records in employment, average wages, minimum wages, foreign investment and exports,” said the secretary, pointing out that these achievements have been reflected in the attraction of foreign direct investments, since so far this year, Mexico has received 20 billion dollars in investments, more than half of the 36 billion registered during the entire previous year.

The Minister of Economy emphasized that Mexico’s strategic position in North America has been fundamental to this growth, since the country has 14 Free Trade Agreements covering 50 nations, the most important being the T-MEC. Buenrostro pointed out that this region represents 30 percent of the global GDP and generates trade equivalent to 3.1 million dollars per minute.

The T-MEC is being reviewed

The official also addressed the next review of the T-MEC in 2026, ensuring that work is already being done together with companies and the next Secretary of Economy, Marcelo Ebrard, to prepare this evaluation that will define trade relations in North America for the next 16 years.

“We have been working since March together with companies and workers in view of what would be a review and an assessment of the T-MEC. We are also already working with the next Secretary of Economy in the transition team,” she assured.

Buenrostro explained that the reconfiguration of the global economy, caused by the trade war between China and the US, COVID-19 and the war in Ukraine, has benefited Mexico by promoting more regional economic development, taking advantage of its privileged geographic location and its demographic bonus.

Source: elfinanciero